Orders of the Day — Local Government Finance (Supplementary Credit Approvals) Bill

House of Commons, 8 July 1997.

DUTY OF SECRETARY OF STATE TO HAVE REGARD TO ACCESSIBILITY STANDARDS

Adrian Sanders (Liberal Democrat, Torbay)

I beg to move, That the clause be read a Second time. The new clause would put some restrictions on the expenditure of moneys drawn down from the supplementary credit approvals. We believe that it presents an excellent opportunity to address the serious problem of the lack of accessible housing for disabled people. That problem has existed for many years. According to the Royal Association for Disability and Rehabilitation, a considerable amount of local authority housing is inaccessible to disabled people. That leads not only to disabled people waiting long periods for rehousing, and living in inappropriate accommodation, but to massive expenditure on building adaptions. In 1994–95, local authorities spent nearly £85 million adapting properties for disabled people. That is a considerable amount, and much expenditure is a direct consequence of not having a building regulation that makes the necessary arrangements should existing housing stock be required by people with disabilities. Two years ago, the Department of the Environment issued proposals to extend part M of the building regulations, which ensures accessibility to all new housing. The Department has not moved on from that initial set of proposals. Unless part M is extended quickly, it will have no effect on the supplementary credit approvals and an opportunity will be lost. New clause 1 would ensure that new build and renovated properties are accessible to disabled people. We hope that our new clause will be supported on all sides of the House so that people with disabilities will no longer have to wait for housing adaptions, and disabled people on housing waiting lists will be able to move into accommodation that is appropriate to their needs.

Nick Raynsford (Labour, Greenwich and Woolwich)

As the hon. Member for Torbay (Mr. Sanders) has said, new clause 1 would place a new duty on the Secretary of State to take account of each local authority's strategy to ensure full accessibility standards in determining the amount of any supplementary credit approval. Although he may not be aware of it, the hon. Gentleman's new clause would apply to the determination of all supplementary credit approvals and not just to those issued under the capital receipts initiative. Therefore, the new clause may go rather further than the hon. Gentleman intends. I do not think that, in his heart of hearts, the hon. Gentleman sees the purpose of requiring that accessibility standards be considered when distributing supplementary credit approvals for composting, flood defences or for cycle lanes. However, that would be the effect of the new clause. While we cannot possibly accept the new clause because it would create a nonsensical position, the hon. Gentleman has nevertheless raised an issue which the Government take very seriously. The hon. Gentleman knows that because, when he raised the issue on Second Reading. I assured him that the Government were considering seriously part M of the building regulations and its extension to residential dwellings. Under the previous Government, the Department issued a consultation paper on the subject. We have given careful thought to the many responses that we have received and I have been actively involved in bringing together the House Builders Federation and the Joseph Rowntree Foundation, which take slightly different views on how progress should be made. We are trying to find a sensible accord that will allow real progress without imposing unreasonable additional costs that might have an adverse effect on individual house buyers and the market. We are taking urgent action on the issue, which we take very seriously. In the meantime, measures are in place to ensure that all new developments of special needs housing, and housing for the elderly and frail, are covered by Housing Corporation scheme standards, which specifically require that the housing design must provide for the access needs of older people and must meet a range of accessibility standards. Housing specifically for wheelchair users has to meet further guidelines agreed between the corporation and the National Wheelchair Housing Association Group. Any passenger lifts in new social housing must be able to accommodate wheelchairs.

Paul Beresford (Conservative, Mole Valley)

Funnily enough, in a way I support the Minister's argument that the new clause would increase bureaucracy and work for the Department and local authorities. I am particularly conscious of that, because the Bill will already double their work load. Does the Minister agree that the Bill introduces a twin-track approach, bringing in a separate parallel procedure similar to those already existing for local authorities and the Department?

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman is wrong on both counts. As I hope he knows, the Bill has been warmly welcomed by local authorities throughout the country. They see it as a means of increasing investment in housing, which has been scandalously neglected for the past 18 years. My point was not about bureaucracy, but about the need to ensure effective measures to extend accessibility standards in new housing and in the conversion of older housing without imposing unreasonable costs that would hit the consumer and possibly harm the housing market. That is a sensible concern. We are working in everybody's interests to improve accessibility for people with disabilities in a practical way. I was assuring the hon. Member for Torbay that there were safeguards on all new housing association developments. Similar standards apply to new housing developments by housing associations supported by local authority social housing grant. Any housing associations developments with funding from supplementary credit approvals under the capital receipts initiative will have to meet those standards. The standards of accessibility that the hon. Gentleman is seeking in new investment undertaken as a result of the initiative will be guaranteed. In the light of my explanation of why the problem cannot be dealt with in the way that the hon. Gentleman suggests and my assurances that the Government already have that important matter under active consideration, I hope that he will agree not to press the new clause.

Adrian Sanders (Liberal Democrat, Torbay)

I thank the Minister for that comprehensive explanation, but the purpose of the new clause is not just to focus on developments that are specifically designed for people with disabilities, but to ensure that a person who acquires a disability in later life can remain in the home that they had lived in until they acquired that disability. For example, stairways should be designed with possible later adaptation to add a mechanical stairlift in mind. That would ensure that people with disabilities could remain in the community and would not be ghettoised in housing for the disabled. We look to the Government to bring in such standards, because they have been lacking until now. Whether or not the Bill goes that far, cycleways should be accessible to people with disabilities. If it does, all well and good, but, although we take on board the Minister's comments—and I thank him for his reply—we wish to push the new clause to a vote. It is an important marker which demonstrates our slightly different approach. We do not want people with disabilities to be ghettoised; everyone should have the possibility of their housing being adapted if that is required at a later date. Let me give a wonderful example from my constituency. Some houses had supposedly been designed for elderly people, but no provision to that effect had been made in the building regulations. The kitchen cupboards were too high for elderly people to reach, as elderly people are not quite as tall as younger people; we lose a few inches as we get older. The food cupboard was in front of a water heating pipe, so it was useless for the storage of food. Such incidences require local authorities to spend money on adjustments that would not be required if standards had been laid down before construction.

LOCAL AUTHORITY DEBT REDUCTION STRATEGIES

Christopher Chope (Conservative, Christchurch)

I beg to move, That the clause be read a Second time. The new clause is designed to be helpful to the Government, because its purpose is to ensure that local authorities have the chance to participate in the Chancellor's five-year deficit reduction strategy. In essence, the new clause would require local authorities seeking supplementary credit approvals to submit a five-year debt reduction plan to the Secretary of State. Debt is a massive problem for local authorities. The "Financial Statement and Budget Report" produced by the Government shows in table 4A.3 on page 115 that local authority interest payments amount to £4.4 billion a year. That compares with some £6.7 billion of gross capital expenditure before depreciation. In other words, interest payments are almost as great as the capital expenditure or investment each year. We have tabled the new clause to try to get local authorities to concentrate their minds on the need to reduce that debt burden. The latest figures which I have for the total of local authority debt, which were published in the Bank of England Quarterly Bulletin for November last year, show that at the end of March 1996 it was some £49,563 million, or £49.5 billion. That is a very high figure indeed. Table 1.1 on page 12 of the Red Book shows the projected change to the public sector borrowing requirement forecast for this year as a result of the latest Budget compared with the November 1996 Budget. It puts the issues in context, because it shows the extent to which the Government have been generous by giving £200 million extra under the local authority capital receipts initiative. The table shows that there is, indeed, a £200 million increase in the PSBR forecast as a result of that initiative, but, as a result of everything else, it is reduced by £8.3 billion. At a time when the total PSBR is falling by £8 billion because of the previous Government's prudent budgeting, the Government find only £200 million extra for local authority capital expenditure under the local authority capital receipts initiative. I suspect that, having looked at the figures more closely, housing authorities and people concerned about local authority housing will express disillusion and dismay at the fact that they have been misled by the Labour party into thinking that there would be a substantial input of extra money, whereas it is £200 million this year, which is paltry in the context of the PSBR forecast.

Louise Ellman (Labour/Co-operative, Liverpool, Riverside)

Would the hon. Gentleman like to comment on the fact that local authorities and the people of this country regarded as paltry and derisory the action taken by the Conservative Government to prevent house building, which led to a period of social crisis? Against that background, he should welcome every attempt to invest in our housing stock to provide homes and employment.

Christopher Chope (Conservative, Christchurch)

The hon. Lady will be extremely disappointed when she looks at the figures. Each year, local authorities receive about £1 billion of capital receipts as a result of sales, so for the current financial year and next year, there will be another £2 billion of capital receipts. When the Labour party made its commitment before the general election to allow more of those receipts to cascade down and produce a housing revival, people thought that that money and some of the previous capital receipts that had been set aside would be made available, and that from the onset of a new Labour Government all capital receipts obtained by local authorities would also be made available. Existing capital receipts will be released at the rate of £200 million this year and £700 million next year, whereas we were told that £5 billion would be released over five years. The effect of taking this year and next year together is that about £900 million will be released under the so-called capital receipts initiative, but £2 billion will be added to local authority capital receipts as a result of the normal process. A comparison of the position in two years' time with the position as of April this year shows that local authorities will have more capital receipts that they cannot spend after two years of Labour government than they had at the end of 18 years of Conservative government.

Paul Beresford (Conservative, Mole Valley)

I am in slight disagreement with my hon. Friend. The Bill deals with supplementary credit approvals and, in fact, no capital receipts are released, although reference is made to that. We will have the basic credit approvals allocated under the housing investment programmes on one system, and a parallel system—with extra bureaucracy—for supplementary credit approvals merely as a flag-waving exercise for the Labour party's manifesto pledge.

Christopher Chope (Conservative, Christchurch)

My hon. Friend is right to challenge me for having fallen for the Government's propaganda. The Bill deals not with the release of capital receipts but with the application of supplementary credit approvals as a cover for a promise made during the election campaign which Labour has been unable to deliver in practice.

Brian Iddon (Labour, Bolton South East)

Is the hon. Gentleman aware that, after 1979, the previous Government put so many people out of work in the construction industry that restarting that industry will have to be done in a phased way, as my right hon. Friend the Chancellor proposes?

Christopher Chope (Conservative, Christchurch)

I am almost speechless. The Government will have to come to terms with this—the construction industry is either booming or in the depths of a recession. The Chancellor has said that he will release capital receipts, taking account of the needs and capacity of the construction industry. I presume that the fact that the Chancellor only felt fit to release £200 million under the supplementary credit approvals programme shows that he thinks that he has inherited a construction industry from the previous Administration that is extremely healthy and is in danger of overheating. We have read of many fears that there is a danger of overheating in the construction industry. I find the hon. Gentleman's intervention amazing. I hope that the Government will accept the new clause—which is in line with their deficit reduction strategy—as recognition of the fact that there is a real debt problem for local authorities. The sooner authorities recognise that, if they reduce debt, they will be able to spend more on providing services and investment, the better.

Andrew Lansley (Conservative, South Cambridgeshire)

On Second Reading, a number of questions were raised, and I was fortunate to be called to raise some. The context in which the Bill would emerge was not clear at that time, as we did not know the character of the Budget or the provision that would be made by the Chancellor. It is timely that my right hon. and hon. Friends have tabled the new clause, since it would have been difficult to structure such a clause at an earlier stage. I agree very much with my hon. Friend the Member for Christchurch (Mr. Chope) that the intention behind the new clause is to assist the Government. Reference was made in Committee by my hon. Friend the Member for Christchurch to the Labour manifesto, which stated that capital receipts would be phased to match the capacity of the building industry"— to which my hon. Friend and others have referred— and to meet the requirements of sound economic management."— [Official Report, Standing Committee A, 24 June 1997; c. 9.] Treasury Ministers estimate that the capacity utilisation of the building industry is above the long-run average at present. The new clause relates more to the question of sound economic management, and the addition of the new clause to the Bill would assist in that process. The Government have produced a Budget, the intention of which is to secure the reduction of borrowing in the public sector; however, the Bill will increase borrowing in the public sector. The two cannot be right. In present circumstances, we should not enact a measure that would negate the reductions in public borrowing. We ought to set the Bill in that context. I support the new clause because I represent two authorities in my constituency. One is debt-free, while the other has substantial debts. It is clear from the way in which the consultation paper issued by the Ministers is structured that they contemplate the possibility of debt-free authorities, although having been allocated supplementary credit approvals, choosing not to take them up. Paragraph 24 of that paper states: Arrangements would be made to redistribute any SCAs made available either from debt-free authorities or from authorities which had not produced adequate spending plans. In the case of debt free authorities, I can well understand members of South Cambridgeshire district council choosing not to take up the supplementary credit approvals. Taking them up would remove their debt-free status and lead them to incur costs through borrowing. The absence of such costs and the income that the authority receives from the set-aside receipts which it has accumulated enable it to be an authority that does not levy a council tax. Authorities that have been prudent and are meeting service needs but are not levying a substantial council tax may be allocated supplementary credit approvals but may choose not to take them up. If those SCAs are reallocated, it should be only to authorities that continue down the path of increased prudence in their financial management. Prudent authorities should not be benefiting profligate authorities that might increase borrowing. We now understand the consequences of the Bill, which were not clear on Second Reading. At that time, it was not clear who would pay for the cost. There is no cost-free option. The capital receipts do not sit around in a cash fund. Even in South Cambridgeshire district, the council's provision for credit liabilities set aside is not backed by cash. The cash generated has been used to pay off borrowing. Who pays? On Second Reading, various possibilities emerged—one idea was that it would be paid for through council rents and another was that it would be paid for through the council tax. The implication of the consultation paper is that the general taxpayer will pay, and we see that in the Budget. The increase in public sector borrowing requirement of £200 million and £700 million to which my hon. Friend the Member for Christchurch referred has had to be offset in the Budget by tax-raising measures. The direct result is that other taxpayers will be funding the increase in borrowing for this purpose. It is all the more important that those taxpayers should ensure that they are not building up a further and growing liability through borrowing that will magnify in time and add to the overall tax burden. It is bad enough that the Budget should have added 1 per cent. to the tax burden this year and another 0.5 per cent. next, without adding to the burden beyond that. For those reasons, it is important that we add the new clause to the Bill and give ourselves the opportunity to move public sector borrowing in the same direction in both local and central Government. Therefore, I support the new clause.

James Clappison (Conservative, Hertsmere)

It is a pleasure to follow the analysis given by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley). My hon. Friend the Member for Christchurch (Mr. Chope) argued cogently in support of the new clause. It is important to return to the subject of debt and the servicing of debt, because the issue of debt is an important starting point in the history of capital receipts and the Bill. When in opposition, Labour Members and, certainly, present Ministers widely believed that the capital receipts—the proceeds of house sales and other assets—were locked away, being wasted, and were not put to any good purpose. We were told—the Minister nods his head now, but I remind him of what he said in opposition. Last year, he said that a Labour Government would release capital receipts and added: We will do it because it makes sense to use the resources that are currently wasted to get people back to work, to build homes".—[Official Report, Third Standing Committee on Delegated Legislation, 17 December 1996; c. 10.] The hon. Gentleman also talked about "foolish" Government restrictions. I hope that he realises the folly of his words, because those resources, as he well knows, have never been wasted but have been used by local authorities, as my hon. Friend the Member for South Cambridgeshire rightly said, to make provision for credit liability, to support the expenditure of local authorities and to service local authority debt. It is one of the fictions perpetrated by the Labour party that receipts have not been put to any good use. As the Minister knows now, if he did not when he uttered those words, debt-free local authorities have always been able to spend their entire capital receipts as they see fit. That is contained in his consultation paper. He has come to that knowledge. Local authorities with debts are required to set aside capital receipts on account of them: 75 per cent. for the proceeds of the sale of houses, and 50 per cent. for the sale of other assets. We must return to the important issue of how to make provision for local authority debt. It is interesting that the Treasury's financial statement was mentioned, because another fiction perpetrated by the Labour party was that the release of council house receipts would have no effect on public expenditure. I remember having that argument several times with Labour spokesmen in opposition. They would not have it that such a release amounted to public expenditure. As we told them, every penny spent from the capital receipts amounts to additional public expenditure, because provision must be made for the way in which capital receipts are used. It is interesting that the Labour party now admits, in the "Financial Statement and Budget Report" to which my hon. Friend the Member for Christchurch properly referred, that every penny of the capital receipts initiative, as it is called, amounts to extra public expenditure. That fact appears in the financial statement set out by the Chancellor as part of general Government expenditure, outside the control total, for that is what matters for these purposes. The Minister nods his head at that, but one of the classic fudges perpetrated by the Labour party was that, if public expenditure was outside the control total, it somehow did not count. He should know that the control total is for the internal purpose of controlling the expenditure of Departments. Expenditure outside the control total is still part of general Government expenditure which has to be paid for. It is also made clear in the financial statement that it counts towards the public sector borrowing requirement. In at least two places in the financial statement, it may be seen that that expenditure is counted as part of general Government expenditure and as counting toward the PSBR. I referred to the alleged capital receipts initiative because my hon. Friend the Member for Mole Valley (Sir P. Beresford) made an important point, which was properly accepted by my hon. Friend the Member for Christchurch. It is nonsense to talk about this money coming from capital receipts; it does not. There is not one penny piece of capital receipts in any of this expenditure. It is all additional government expenditure by way of supplementary credit approval. The only way in which capital receipts come into the picture is as part of the formulae for the distribution of that spending. I draw the attention of the hon. Member for Liverpool, Riverside (Ms Ellman) to the somewhat bizarre formulae in the Government's consultation document. Three formulae are set out by the Government as ways in which the money could be distributed. The Government have chosen a way that will penalise authorities such as hers.

Louise Ellman (Labour/Co-operative, Liverpool, Riverside)

Will the hon. Gentleman give way?

James Clappison (Conservative, Hertsmere)

I shall let the hon. Lady respond in a minute, if she wishes. I advise her to examine the consultation document formulae. In 1997–98, Liverpool will lose about £600,000 on the Government's chosen formula and will lose more than £3 million in the following year. I shall give way, but I think that she must take issue with her Front-Bench colleagues.

Louise Ellman (Labour/Co-operative, Liverpool, Riverside)

I am extremely surprised to hear those comments from the hon. Gentleman. The Bill states clearly that the needs as well as the resources of areas such as Liverpool will be considered. That is a major plank of the Bill. I remind the hon. Gentleman and his honourable colleagues that they are opposing the Bill in its entirety; therefore, it is hypocritical of them to pretend that there are deficiencies in the Bill when they are opposed to the principle of more building to meet social need and provide employment.

James Clappison (Conservative, Hertsmere)

I accept the hon. Lady's point. She wants more spending. That is a theme that we shall no doubt hear from Labour Members on several occasions during this Parliament. The point that the hon. Lady needs to take up with her Front-Bench team—not with me, because I can see the force of the argument for the Liverpools of this world—is that her party in government has decided to spend this money and then chosen a formula for doing so that will penalise authorities such as Liverpool, the inner-London authorities and 33 of the 36 metropolitan district authorities, rather than authorities such as mine—Hertsmere—and Surrey Heath and Malvern Hills, all of which benefit from the formula chosen by the Labour party.

Eric Pickles (Conservative, Brentwood and Ongar)

My hon. Friend has great knowledge of these matters. Will he confirm that the previous Government's formula took need into consideration, especially in Liverpool, Riverside, and that the new formula dilutes consideration of need by taking into account capital receipts? The good people of Liverpool are materially worse off under the new formula than under the previous formula.

James Clappison (Conservative, Hertsmere)

My hon. Friend makes an excellent point. We went to great lengths to produce a fair formula based on need. If the Government had chosen such a formula, they might have produced a different result. The alternative formula is in the Government's consultation paper. I invite the hon. Lady to look at it and do the arithmetic. She will see that her authority and many of those represented by her colleagues will lose out under the proposed formula for spending the money that has been chosen by her Ministers.

Louise Ellman (Labour/Co-operative, Liverpool, Riverside)

I am surprised that the hon. Gentleman persists in his deliberate misunderstanding of what is happening and what happened under the previous Government. Neither Liverpool's overall needs nor its housing needs were met by the previous Government. That is why there is now a major crisis in Liverpool in local authority housing and the housing stock needs to be improved. I suggest that the hon. Gentleman repent a little of the misdeeds of his Government and join us in trying to put right an injustice that has persisted for too long.

James Clappison (Conservative, Hertsmere)

The hon. Lady would know if she had served on Committees with me—as the Under-Secretary, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), has—that I am the first to admit a mistake and repent. I put a proposition to the hon. Lady and to the Minister that the Minister may deny. Under the formula that has been chosen by the Government of two thirds need and one third cumulative capital receipts, Liverpool receives less than it would have received under the alternative formula of 100 per cent. need set out in the consultation document. The same applies to many other authorities, in inner-city areas, metropolitan districts, and so on.

Paul Beresford (Conservative, Mole Valley)

While my hon. Friend is in a repenting mood, will he repent a little of the formula and agree with me that it will in some aspects benefit those local authorities that have successfully pushed and promoted the right to buy and vacant sales?

James Clappison (Conservative, Hertsmere)

My hon. Friend makes another important point, with which I am sure that the Minister will want to deal in his reply. Before I stray too far from the subject of debt, I emphasise that new clause 2 is important because local authorities have massive debts. We have to think as much about the repayment and servicing of those debts as we think about new spending, which the Government have undertaken in this new spending commitment. My hon. Friend the Member for Christchurch mentioned the huge proportions of total local authority debt—more than £49 billion. Within that overall total, some authorities have particularly severe problems of indebtedness. According to figures that the Library has supplied to me based on debt per resident, some of the worst cases of debt are in authorities such as Islington, which has almost £5,000 of debt per head. Many other local authorities of a similar nature have debts running into thousands and thousands of pounds. It is important that, when we look at debt reduction overall, we also look at local authority debt reduction. As my hon. Friend the Member for Christchurch so rightly pointed out, those liabilities are going to persist long into the future for the unfortunate residents of those local authority areas. The figures are huge, and it is right that we should think about that problem.

Margaret Moran (Labour, Luton South)

Will my right hon. Friend give way?

James Clappison (Conservative, Hertsmere)

I am neither a Privy Councillor nor an hon. Friend, but I will give way.

Margaret Moran (Labour, Luton South)

I apologise for elevating the hon. Gentleman well above his station, but I want to draw his attention to certain facts. He speaks eloquently on the level of local authority debt, but he should perhaps be reminded that, during the period from 1990 to 1996, his Government allowed public sector debt to double from the equivalent of £2,200 per head to £5,600 per head; yet, in the same period, local authority debt fell from the equivalent of £899 per head to £843. That completely contradicts the point that the hon. Gentleman is trying to illustrate and it demonstrates economic incompetence of the highest degree on the part of the previous Government, given that they also allowed house building to be cut by one third during the same period. Economic incompetence—housing incompetence.

James Clappison (Conservative, Hertsmere)

I might be straying from the subject of the debate, but I invite the hon. Lady to pay attention to what is said in Labour's financial statement about the repayment of the public sector borrowing requirement. On the existing figures before the Budget, we were well on course to return to repaying public sector debt by 2000. Those were the figures given by her own right hon. Friend the Chancellor. As for debt, the overall lesson for Ministers is that, contrary to what they believed when they were in opposition, there is no such thing as a free lunch. Now they are in government, that has been confirmed—there is no such thing as a free lunch, not even if it has the blessing of the Minister without Portfolio.

Oliver Letwin (Conservative, West Dorset)

Before I turn to the main subject that I wish to address, I cannot refrain from mentioning that it is evident to the majority of people in this country, if not to Labour Members, that the person or persons who were mainly responsible for not attending to the needs of Liverpool under the last Administration were Mr. Hatton and his colleagues.

Paul Beresford (Conservative, Mole Valley)

And those who followed.

Oliver Letwin (Conservative, West Dorset)

Indeed. The importance of the new clause lies in the fact that the Government's response will constitute an important test of their true motive in drafting the Bill in the first place. As our discussion of the Bill has revealed, the Bill's main purpose is, in the first instance, to release spending. Spending is being released in a way that enables the Government to claim that they can provide local authorities with the ability to spend money that otherwise the spending limits would not have allowed. If that were the sole purpose of the Bill, it would be a disreputable attempt by one Department of State to undermine the very effects that the Government as a whole and the Treasury are seeking to achieve globally. We have, however, been told by Labour Members and Ministers that the purpose of the Bill goes beyond that and that it is not designed merely to allow local authorities to spend rather more in the current year and the next. They say that the intention is to permit a progressive and phased—I believe that was the word used by the hon. Member for Bolton, South-East (Dr. Iddon)—increase in the amount that can be spent on the construction industry's activities, so as to permit a sustainable, long-term development of the housing programme in this country. That is a laudable aim and I have no doubt that it is shared by all hon. Members on both sides of the House. As I said, the new clause and the Government's response to it is a good test of the proposition that that is indeed the Government's true motivation. There can be no doubt that the Bill permits, not only spending, but a considerable increase—in fact, pound for pound—in the amount of net borrowing in which local authorities will be engaged. Ministers have entirely admitted that proposition. If that is the case, the cumulative effect on the public sector borrowing requirement and on the stock of public debt in the coming years will be very noticeable. There will come a time, towards the end of this Parliament, when the Treasury, if not the Department of the Environment, will have to call a halt to that increase in PSBR and in the public debt. We are reminded, are we not, of the phrase, too happy to be quoted, of a late lamented Labour Member, Tony Crosland, when he eventually spotted that his policies were sending the PSBR in relation to local authorities out of control? If, in this instance, the Government genuinely intend not merely to release extra expenditure to mollify their Back Benches in this first year but to create a sustained programme of development, it must follow that the Government would wish to support moves to ensure that, over the long term, debt does not go out of control, and that the increased spending is matched by a phased debt reduction programme, as recommended in the new clause. For that reason, my hon. Friend the Member for Christchurch (Mr. Chope) has said that this is a helpful clause, which the Government should be prepared to accept if they are genuinely committed to a long-term programme.

Hilary Armstrong (Labour, North West Durham)

Are you saying, Mr. Deputy Speaker, that the previous Government were not interested in controlling debt?

Oliver Letwin (Conservative, West Dorset)

Mr. Deputy Speaker, I suspect it was not you who were saying that but I, but I am privileged to be associated with you, and I would that I had your eloquence or your authority in the Chamber. Undoubtedly, the previous Government were extremely anxious to control the public sector borrowing requirement. If I may reply in one word to that intervention and to the earlier remark of the hon. Member for Luton, South (Ms Moran), there is a great difference between increasing the PSBR at a time of recession and doing so at a time of growth. The Chancellor says in his recent great work—the magnum opus with which we have all been presented some time after the Budget was given to us—that he intends us to be in a time of sustained growth. In the theology—perhaps I should say the metaphysics—of the Chancellor and his colleagues, there is no excuse for an increase in the PSBR on a systemic basis over a period of sustained growth during this Parliament. If this is a coherent policy to achieve sustained growth in the housing market, there should be a phased debt reduction programme. If, in the light of that, the Government insist on rejecting the new clause, that will prove to the House and the country that the purpose of the Bill, as of much else that is being proposed in that domain, is merely to increase spending in the hope that no one will notice what is going on, without the slightest view of a long-term progression that we could support.

Paul Burstow (Liberal Democrat, Sutton and Cheam)

I shall make only a few brief comments on the new clause—no doubt to Labour Members' relief. I want to pick up one or two remarks that Conservative Members have made about the alleged virtues of the new clause. It is a hit rich for the Conservative party to advance the cause of debt reduction, given the overwhelming contribution that it has made in recent years to increasing the national debt. It is not that there are no lessons that Members of all other parties on both sides of the Chamber can learn from the Conservative party in that respect—simply that that might provoke some comment.

Oliver Letwin (Conservative, West Dorset)

Does the hon. Gentleman not accept the proposition that I was advancing, that there is a significant difference between an increase in the PSBR in times of recession and such an increase in times of growth?

Paul Burstow (Liberal Democrat, Sutton and Cheam)

I am sure that, if the hon. Gentleman reads the Committee Hansard, he will note that I and my hon. Friend the Member for Torbay (Mr. Sanders) have been advancing on behalf of others—notably the Chartered Institute of Housing—the case for a change in the accounting regime, moving towards the use of the Government general finance deficit to deal with these issues. I note from reading the report of the Second Reading debate that the hon. Gentleman criticised the Liberal Democrats for advancing that device. We regard that device, not as a crock of gold or a panacea, but as a means by which we can change the accounting regime and treat borrowing for investment in the creation of new assets—which is what we are talking about—differently from borrowing to fund on-going recurring expenditure, which is what the previous Government often did. We criticise the way in which privatisation receipts have been used to deflate the PSBR but not for proper funding. Conservative Members have adopted a contradictory position. Surprisingly, they are moving hack towards supporting assessing the allocation of capital receipts solely on the basis of housing need. Having watched the way in which challenge and single regeneration budget initiatives progressed under the previous Government, I find it refreshing that a short time in opposition has changed the Conservatives' minds. We shall not support the new clause, because it adds nothing to the Bill. We do not believe that the argument about the Government's desire to increase expenditure is especially well made, because we criticise the fact that the Government are not adequately investing in housing as a consequence of the Bill, and we see no need to tie to it a specific measure to require local authorities to reduce debt. However, we do think that, obviously, local authorities need to manage their debt prudently, and that that should be a matter for local authorities, not Parliament, to dictate.

Hilary Armstrong (Labour, North West Durham)

We have had an interesting little debate. When the hon. Member for Christchurch (Mr. Chope) moved the new clause, he appeared to have difficulty in keeping a straight face because, obviously, he was simply stirring the pot. He knows that the new clause is not serious, because, even were it incorporated in the Bill, it would not do what he wants it to do. For many years, the Conservatives were responsible for local authority debt, sanctioning the amounts that local authorities could spend and borrow. They frequently castigated local authorities for having so much debt, but they never took action to tackle that problem or even saw the need to do so. As hon. Members have noted in interventions and the hon. Member for Sutton and Cheam (Mr. Burstow) has noticed, the Conservatives have been responsible for increasing debt, without using that debt to good effect—in other words, without using it to invest.

Paul Beresford (Conservative, Mole Valley)

Will the hon. Lady give way?

Hilary Armstrong (Labour, North West Durham)

Of course I will allow the hon. Gentleman to intervene, but I want to finish the point. The previous Government did not use increased borrowing to invest and get the economy growing—they did the opposite. The hon. Member for South Dorset (Mr. Bruce) appeared to acknowledge that we are just emerging from 18 years of recession. I believe that most people experienced the past 18 years as two severe periods of boom and bust, which is why we have adopted a very different approach to borrowing. My right hon. Friend the Chancellor said in his Budget statement that the Government would keep total national debt at a prudent and sensible level, but that, where the Budget does allow increased borrowing, it will be borrowing to finance investment, not day-to-day expenditure. I have said that throughout. I wondered whether hon. Members had not been present on Second Reading or had not read the report of that debate, because I have always said that we know that borrowing will increase, but that it is borrowing to finance investment, not to be frittered away on day-to-day expenditure. We want borrowing for investment, so that we may increase the capacity of the economy, and increase the capacity of the construction industry so that it may play its part in a growing economy.

Paul Beresford (Conservative, Mole Valley)

May I take it that the Government are putting in £200 million, and then £700 million, in SCAs; and that BCAs will continue next year at the same amount, plus inflation?

Hilary Armstrong (Labour, North West Durham)

This measure has to do with supplementary credit approvals, not basic credit approvals. The hon. Member for Christchurch tried to suggest that local government borrowing is increasing all the time, and that local authorities must play their part in the Government's overall programme for reducing national debt—hence the idea of a five-year debt reduction strategy as suggested in the new clause. Indeed, the new clause would make the issue of any SCA subject to local authorities publishing and submitting to the Secretary of State a five-year strategy of that kind. The new clause does not deal with basic credit approvals, or with how local government will pay for them or manage the debt. The condition would apply to any SCA, not just to SCAs issued under this initiative. I am not sure that that was the intention of the Opposition—although they may have intended to contrast SCAs issued under the capital receipts initiative for local authorities—a debt-increasing move—with the Chancellor's five-year reduction plan for the PSBR.

Paul Beresford (Conservative, Mole Valley)

I have not yet heard an answer to my question. In helping local authorities to control their debt, is the hon. Lady going to bring in a reduction in BCAs partly or completely to compensate for the SCAs? I repeat: may we assume that SCAs for next year will be the same as they were in this financial year, plus inflation?

Hilary Armstrong (Labour, North West Durham)

Opposition Members should listen more carefully. I have answered that three times today; I also answered it on Second Reading and in Committee. This is additional spending—I have already accepted that it is.

Paul Beresford (Conservative, Mole Valley)

So the answer is yes?

Hilary Armstrong (Labour, North West Durham)

If it is additional spending, it means that there will be no specific measures to reduce what is already committed spending by the same amount—otherwise, it would not be additional spending.

Paul Beresford (Conservative, Mole Valley)

So the answer is yes?

Hilary Armstrong (Labour, North West Durham)

Opposition Members are having trouble keeping a straight face, and if we go on much longer like this, the whole House will have the same trouble. We know that the Conservatives are not serious about dealing with housing need, which the Conservative Government left in a state of desperate neglect. That explains the need for this Bill.

Hilary Armstrong (Labour, North West Durham)

I may take more interventions later; meanwhile, I suggest that Conservative Members keep listening, because that will help them to understand what I have been saying. Conservative Members appear to believe—I deduce this from the new clause itself—that there is no prudent or sustainable strategy for reducing local authority borrowing. Yet the position in local government is fairly healthy. Local authorities' debts have remained steady in recent years; at the end of 1996, they represented only 13 per cent. of general Government debt. and 7 per cent. of GDP. It is important to allow local authorities themselves to decide how best to manage their debt and their investments, in conformity with good Treasury management practice and the need to achieve best value for money for the local taxpayer and rate payer. By insisting on publication and submission to the Secretary of State of a debt reduction strategy, the new clause would undermine the work that local authorities are already doing, thus necessitating extra spending and more paperwork. That would be undesirable, and unnecessary for local authorities.

Eric Pickles (Conservative, Brentwood and Ongar)

If, as the hon. Lady says, local authorities already have a coherent strategy for reducing debt, what is the problem with announcing what that strategy is?

Hilary Armstrong (Labour, North West Durham)

The hon. Gentleman's problem is that he lacks patience. I am about to explain to him what local government already does, and why what he seeks would impose more bureaucratic burdens. The former Administration said that they wanted to reduce bureaucracy and increase deregulation, which is why I find the hon. Gentleman's support for the new clause somewhat bizarre.

Paul Beresford (Conservative, Mole Valley)

We already have the bureaucracy associated with BCAs. Now we suggest a parallel system similar to it. That will indeed double the bureaucracy, and it would not be necessary, but for the fact that the Government feel the need to genuflect in the direction of their manifesto commitment on capital receipts—even though none is being released.

Hilary Armstrong (Labour, North West Durham)

Perhaps the hon. Gentleman believes that political parties need not think about their manifestos. The Bill meets our commitment in that respect. It is far from obvious what the obligation to prepare a five-year strategy for debt reduction would require a local authority to do. The Chartered Institute of Public Finance and Accountancy already gives guidance to local authorities, building on section 45 of the Local Government and Housing Act 1989, which requires local authorities to make a Treasury management policy statement. I note that no Conservative Minister in the past seven years. when issuing SCAs, thought it desirable to require local government to produce such a strategy. In fact, existing controls on borrowing appear to have been accepted as perfectly adequate.

George Stevenson (Labour, Stoke-on-Trent South)

Has not my hon. Friend just put her finger on the bogus nature of the new clause? The previous Government extended the use of SCAs with no such debt reduction requirement. There is surely a world of difference between extending SCAs to stimulate the housing market and meet a need, and issuing SCAs, as the Conservatives did, simply to reduce Government support to local authorities.

Hilary Armstrong (Labour, North West Durham)

Absolutely. That is why I began by pointing out that the hon. Member for Christchurch had difficulty keeping a straight face. Local authorities already have a statutory duty to set aside a fixed proportion of their net debt each year from revenue—known as the minimum revenue provision. I see no case for further restrictive controls or further bureaucracy. The new clause is flawed because it would act on supplementary credit approvals but not on basic credit approvals. As the hon. Member for Mole Valley (Sir P. Beresford) said, basic credit approvals authorise the bulk of new local authority borrowing each year, so much of local authority debt would not be covered by the new clause. May I deal briefly with the point made by the hon. Member for South Cambridgeshire (Mr. Lansley), who is no longer in the Chamber, about debt-free authorities? Debt-free authorities will not be disadvantaged or penalised by this measure. They will be free to take up credit approvals if they so wish, and they may choose to use them to meet housing need, without ceasing to be debt free, by spending money that they have set aside to meet their debts. That matter is clear because we have been through it several times in Committee, and most Committee members are now clear about the position of debt-free authorities. The new clause is undesirable and unwanted. I urge the House to reject it.

Christopher Chope (Conservative, Christchurch)

I am disappointed with the Minister's response, because the new clause was tabled to try to help the Government. The Minister demonstrates the Government's inability to come to terms with the fact that there is more than one way to have a debt reduction strategy. She talks about phasing the payments and ensuring that local authorities pay so much capital back each year, but another debt reduction strategy is asset realisation—[interruption.] Labour Members are commenting on the fact that a number of Conservative Members have absented themselves from the Chamber. The reason is that they wish to participate in a democratic election for an important post on a Conservative Back-Bench Committee. They will be back. I am grateful for their active participation in this debate and to debates in Committee. I remind Labour Members that when the Bill was in Committee, speeches on the Government side were made only by Ministers; none was made by Labour Back Benchers. Indeed, there were no Scottish or Welsh Committee members, despite the fact that the Bill applies to Wales. We surmise that that was because Welsh Members might have wanted to speak, and it was clear that the Government had delivered an edict ensuring that only Government Front-Bench Members could speech.

Win Griffiths (Labour, Bridgend)

You are struggling.

Christopher Chope (Conservative, Christchurch)

We are not struggling at all. However, local authorities are struggling with the debt burden, which will increase as a result of the Bill. We suggest that local authorities should be encouraged in the process of asset realisation. During the debate, it has been suggested that the previous Government did nothing to help reduce local authority debt. The previous Administration did a mass to reduce local authority debt, because we enabled people to buy their own council houses, which was the largest privatisation that this country had ever known. Some £20 billion was realised as a result of that process. Without that successful policy, national debt would have increased by even more than it did during the recession. Some Labour Members talked about the net public sector debt per person. In 1979, when the last Government took office, the Conservative Government pulled this country up from virtually the worst performer in terms of net debt to one of the best, compared with other European countries. At the last general election, the only European country with a lower debt ratio was Luxembourg.

Adrian Sanders (Liberal Democrat, Torbay)

Was not this country's debt reduced purely because of the privatisation programme and how it related to the public sector borrowing requirement?

Christopher Chope (Conservative, Christchurch)

We knew all along that the Liberal Democrats were against the privatisation programme. We now have the spectacle that the Government have made some obiter dicta to the effect that they may be in favour of certain privatisation programmes, but even the Liberal Democrats have not yet come round to accepting the benefits that flow from privatisation, particularly in housing—the large-scale voluntary transfer of housing to housing associations, and the sale of individual council houses to tenants who wished to buy them. Those initiatives, which were the hallmark of the last Conservative Government, were opposed tooth and nail by the Liberal Democrat party.

Dave Watts (Labour, St Helens North)

Will the right hon. Gentleman comment on the cost of bed and breakfast to the taxpayer during the 17 yeas that the Conservatives were in power?

Christopher Chope (Conservative, Christchurch)

Any money spent on bed and breakfast was too much. One of the problems was that the last Government brought in measures to deal with bogus asylum seekers who came to this country—

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. I should be grateful if the right hon. Gentleman would now return to the new clause.

Christopher Chope (Conservative, Christchurch)

I was looking forward to the opportunity to respond to a point made in an intervention, but I accept your ruling, Mr. Deputy Speaker that it was too wide of the new clause. The new clause is designed to deal with capital debt reduction. I hope that the House will accept the purpose behind it. The hon. Lady's response was that it would create too much bureaucracy. She said that it would be too burdensome on local authorities to produce a debt redemption strategy, yet we know that any local authority worth its salt could produce such a strategy and should already have an asset realisation strategy, if it is to deliver what its rate and charge payers deserve. [Interruption.] I cannot hear what the Minister is mouthing from a sedentary position. I remain disappointed at her response. I am grateful to my hon. Friends who contributed to this debate so effectively. During the last Parliament, my hon. Friend the Member for Hertsmere (Mr. Clappison) witnessed from the Front Bench the suggestions made by the Labour party, leading people to believe that a pot of gold would be released as soon as a Labour Government came to power. My hon. Friend drew attention once again to the manner in which those people were cruelly misled. My hon. Friend the Member for West Dorset (Mr. Letwin) made another powerful speech, and effective interventions were made by my hon. Friends the Members for Brentwood and Ongar (Mr. Pickles) and for Mole Valley (Sir P. Beresford). We think that this issue is sufficiently important to divide the House. The burden of local authority debt should be brought under control and we are frightened that, under the present Government, it will run completely out of control without such a measure.

LOCAL AUTHORITY INVESTMENTS IN ENERGY EFFICIENCY MEASURES

Tim Yeo (Conservative, South Suffolk)

I beg to move, That the clause be read a Second time. I shall follow the precedent established by my hon. Friend the Member for Christchurch (Mr. Chope) in moving new clause 2 and show the House that I wish to be helpful. I believe that the inclusion of a reference to energy efficiency in the Bill will strengthen it greatly. Energy efficiency is widely, perhaps universally, recognised as a desirable goal. It is one of the few areas where environmental and economic aims coincide. Greater attention to energy efficiency improves the environment, saves money and can, under certain circumstances, create jobs—at least on a temporary basis. Partly because of the lack of controversy surrounding the subject, the issue has become rather unglamorous. It does not attract as much political attention as is justified. Against that background, I am surprised that the Government did not include something like this new clause in the original draft of the Bill. Their failure to do so is part of a consistent and regrettable pattern. As with so many other environmental goals, the Government claim to support energy efficiency. Labour Members have referred to the subject many times in speeches and have used line phrases at home and sometimes abroad. However, there has not been much action—and there was no action at all in the Budget last week. A Treasury press release promised to examine options to help people on low incomes to insulate their homes and save energy. A promise to examine options does not add up to much—particularly when it is set alongside other Budget measures, which include a powerful incentive to increase energy consumption in the form of a cut in value added tax on domestic fuel prices. On 4 December 1996, the then Labour spokesman on environmental issues, the hon. Member for Lewisham, Deptford (Ms Ruddock), said: each year we will publish a 'green book' alongside the Chancellor's Red Book, setting out the environmental implications of Government policy."—[Official Report, 4 December 1996; Vol. 286, c. 991.] No such green book appeared, because Ministers knew that it would expose the Government's gross failure to honour any of their environmental obligations. They knew also that it would expose the fact that the net impact of the Budget measures might well be to increase carbon dioxide emissions. Such an impact is in unhappy and stark contrast to the fine phrases used by the Prime Minister when he addressed the Earth summit in New York a couple of weeks ago. Perhaps the hon. Lady's commitment was the reason why she was not appointed as Minister of State, Department of the Environment. Perhaps she was shuffled off to the sidelines as a warning to other Labour Members not to make commitments of that sort. When the Minister for London and Construction replies to the debate, will he make it clear that the Government intend to make amends by publishing the "green book" that the hon. Member for Deptford promised last December? If he does not, should the House take it as a sign that new Labour, like old Labour, does not give a stuff about the environment—that this is just another pre-election promise that can now be junked, like the promises on pensions, the national health service and on tax? Every one of those promises is now worthless. They were given merely to win votes and are now forgotten. We are left with the Chancellor's promise that the Treasury will report to Parliament in October about the effect of a reduced rate of VAT on energy efficiency materials. However, we do not need to wait until October to know that cutting VAT on energy efficiency materials will encourage investment in energy efficiency. In that context, I draw much encouragement from the comments of the Minister for the Environment—I am sorry to see that he is not in his place for a debate that touches directly on his responsibilities. The right hon. Gentleman succeeded the hon. Member for Deptford, and is now the Minister with responsibility for environmental matters. As recently as last week—unfortunately for the right hon. Gentleman, it was the day before the Budget—he answered a parliamentary question about the need to levy VAT on energy-saving materials at the same rate as VAT on fuel prices. The right hon. Gentleman said: I am certainly on record as supporting that argument. Such a policy is desirable".—[Official Report, 1 July 1997; Vol. 297, c. 90.] When the Minister replies to the debate, will he confirm that he shares the view expressed by his ministerial colleague? Will he confirm that he and his right hon. Friend will resign from the Government in October if the Treasury report does not support their view or will he merely confirm that his views on this issue, as on all other issues, are of no consequence whatever to the Treasury? [Interruption.] That seems to cause great mirth on the Government Front Bench. Will the Minister confirm that, in this Government, the Chancellor and the Treasury are all-powerful, and that the Treasury does not care about either his views or the environment? Last week, the Deputy Prime Minister pronounced on the purpose of the Bill in the context of a press release that was issued with the Budget papers. He set out in two paragraphs the purposes to which the resources that he claims will be released by the Bill will be applied. In that press release, the Deputy Prime Minister did not see fit to mention energy efficiency in a single phrase. That was yet another missed opportunity for the Government to pay even lip service to environmental goals and another sign of their priorities. There are no public spending implications in mentioning energy efficiency in a press release. I am forced to conclude that Ministers mention energy efficiency only when they are attending events such as the Earth summit. As soon as there is a chance to do something, they quickly forget their commitment to green objectives.

Nick Raynsford (Labour, Greenwich and Woolwich)

I was on the Committee.

Tim Yeo (Conservative, South Suffolk)

The hon. Gentleman has remembered. I remind him of recommendation 53, which said: We also recommend that the Government revise the system of capital controls to provide an incentive for energy efficiency by extending the current capital receipts spending 'holiday' to enable local authorities to fund approved energy efficiency and CHP projects. Does the Minister still agree with that unanimous report? If he is unable to accept the new clause or finds it difficult in any way, he would cause himself much less embarrassment by recommending that his hon. Friends vote for it.

John Gummer (Conservative, Suffolk Coastal)

The Government must think seriously about the problem resulting from the arguments in New York. The United States does not believe that Britain is serious in its determination to reduce our carbon dioxide emissions by 20 per cent. by 2010. It is using that as an excuse for taking no action. I have asked the Government several questions about what they intend to do. The answers have been somewhat confusing. When I asked how much of the reduction industry would be expected to bear, the Department of Trade and Industry said that it did not know, but that it was thinking about it and was hoping to estimate the figure, which it would no doubt tell us. In the Budget, the Chancellor of the Exchequer appeared not to have worked out how much more had to be done because of his changes to VAT. He did not have a figure in his mind of the extra emissions that might occur because of the cheapening of fuel. That is a worry. When the Government make such decisions without the facts and suggest that the House should wait until October before we have the facts, it is hard to believe that the Chancellor and the Treasury are taking global warming as seriously as I had hoped they would or as seriously as I believe the Prime Minister suggested they would. The Minister for Local Government and Housing has smiled at every suggestion that has been made today. I hope that she will listen carefully to me now. If the Government do not support the new clause, what are they saying? They are saying that they will not take into account the strategy of any authority to implement a programme of investment in energy efficiency measures. They will ask the House to vote against taking that into account. That does not seem to sit squarely with what the Prime Minister said in New York or what the Government have been saying. The hon. Lady is still smiling. She spends the whole time smiling. That is very happy for her, no doubt, but it suggests that she does not take such matters with the seriousness that they deserve—or that she does not understand them. I have begun to believe that she giggles because she does not understand and does not want to listen to the facts. The Conservatives have agreed to support a bipartisan environment policy because we want to achieve the ends that the Government have said that they accept. In opposition, they did not help much. The two Ministers present today were not well known for coming to the aid of the Green party, but we have forgotten about that and we shall support them. However, we shall keep them to their promises. The Minister and those who flank her should remember this simple fact: if they say that they are going to reduce emissions, they must also say how. If they do not, nobody will believe them. Nobody believes the Government yet. I want to give them the chance to be believed about this—if about nothing else. It is the most important subject for them, because, if they get it wrong, the damage to future generations will be very severe. Does the Minister for London and Construction recommend that the House should vote that the Government should not take into account the energy efficiency strategy of a local authority? If he suggests that we should not vote for the new clause, he will be asking the House to ask the Department to ignore that essential issue. The Minister for Local Government and Housing should take the issue much more seriously if the nation and, more importantly, the international community, are to take the Government more seriously. I despair of them taking her more seriously, but they would take the Government more seriously if they showed how they will deliver what we believe they want to deliver.

Andrew Robathan (Conservative, Blaby)

I support the new clause. My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) spoke lucidly about the need to deliver gains in energy efficiency rather than just talking about them. We have heard fine words from the Prime Minister. In general terms, I applaud most of what he said in New York, as does the whole House, but we need to see some action. My right hon. Friend the Member for Suffolk, Coastal said that the Government's answers were confusing. We all understand that putting VAT on domestic fuel was not a particularly astute move politically by the last Government, but it was a good stick with which to encourage people to use less energy. If we are to reduce the effectiveness of the stick, we need to use a little more carrot to encourage energy efficiency. VAT on domestic fuel is now down to 5 per cent. What is the message from the Government? They cannot decide whether, at minimum cost, to reduce the rate of VAT on energy-saving measures and insulation. It is extraordinarily confusing. The new clause gives the Government the opportunity to benefit the environment by taking account of energy efficiency. It is a serious matter that does not deserve giggles from Ministers. I am not making special pleading for my constituency, but for many years Blaby district council has had a fine record of encouraging energy efficiency in its own housing stock and elsewhere. Harborough district council has a similar excellent record. However, some councils need to be encouraged with a stick and a carrot. The new clause provides a marvellous carrot for local authorities to take seriously energy efficiency and implement previous legislation. I am also involved with the all-party renewable and sustainable energy group, which takes a close interest in these matters. Hon. Members will have received today a communication from Greenpeace, an organisation with which I do not always agree. It is about solar energy being used in Silvertown in docklands. It is an extremely sensible piece of information. Under the new clause, the Government could further the use of solar energy in new housing stock and make an appreciable difference to the energy we use—and, indeed, the energy that we waste—and the carbon that we release into the atmosphere. Although the previous Government were attacked endlessly by the Labour party, they had a proud record in those matters. The home energy efficiency scheme and the neighbourhood energy action scheme resulted in better insulation in the homes of 2 million old people. That makes a profound difference to their lives and to the energy used. It is an absolutely vital issue. I applaud the new clause and support it whole-heartedly. The Government should consider it seriously and not just dismiss it with a giggle as being entirely irrelevant. It is a big issue that matters to a huge number of people. The Government have a chance to do something concrete about it and put their fine words into action.

Nick Raynsford (Labour, Greenwich and Woolwich)

New clause 4 would place a duty on the Secretary of State to take into account each authority's strategy for investment in energy efficiency measures when determining its supplementary credit approval. As I hope that we have already established in debating earlier amendments, the drafting of the new clause would extend its impact well beyond the distribution of additional resources under the Government's capital receipts initiative. It would apply to all supplementary credit approvals. I welcome the hon. Member for South Suffolk (Mr. Yeo) back to the Front Bench, but I can see no compelling case for making a local authority's energy efficiency strategy a pivotal factor when a supplementary credit approval is issued for road safety purposes, firefighting, harbour improvements, flood defences or composting—possibly a subject of concern to some hon. Members.

James Clappison (Conservative, Hertsmere)

It is a serious subject.

Nick Raynsford (Labour, Greenwich and Woolwich)

Indeed, but it is totally irrelevant to energy efficiency in housing.

John Gummer (Conservative, Suffolk Coastal)

Will the Minister give way?

Nick Raynsford (Labour, Greenwich and Woolwich)

I hope that the former Secretary of State will bear with me for a moment. He has jumped to his feet rather rapidly. We are debating measures to give effect to the Government's commitment to release capital receipts for housing purposes, including energy efficiency measures. Had the Opposition prepared the new clause more carefully, it might have achieved their intended effect. However, they have produced a completely unworkable new clause that would produce absurd consequences, as I have illustrated. The former Secretary of State knows only too well that it would be ridiculous to try to take into account energy efficiency in the home when issuing supplementary credit approvals for other purposes.

John Gummer (Conservative, Suffolk Coastal)

For 17 years, civil servants handed me precisely such answers. For 17 years I told them, "Take it away. I shall tell people that this is not the way to achieve what they want, but I shall tell them at the beginning that I want to achieve what they want and I shall make sure that we table an amendment to that effect." I have always told civil servants, "Don't tell me to make a cheap point across the Floor of the House. Let's deliver what we can do together." Our new clause may not be properly worded. The Minister knows from a long time in opposition—he will soon learn again in the same circumstances—that these matters are not so easy in opposition, so will he please give an undertaking that he will ensure that the purpose of the amendment is achieved in a sensible way? If he does, we can all go home quite happy and leave the composting to composters.

Nick Raynsford (Labour, Greenwich and Woolwich)

I shall give the right hon. Gentleman exactly the assurance that he seeks. Had he taken care to read our consultation paper, he would know that the Government intend to do exactly what he has requested. Perhaps, in the intervals of jetting in and out of New York and other places, the right hon. Gentleman might have taken the time to look at our proposals in more detail. Had he done so, he would have been better informed for tonight's debate. Let me assure the right hon. Gentleman and other Opposition Members that energy efficiency is a central concern for the Government. It is a clear commitment. As the hon. Member for South Suffolk acknowledged, under the Home Energy Conservation Act 1995, local authorities have a duty to have strategies to make significant energy efficiency improvements in the domestic sector. Energy efficiency is already taken into account in the annual housing investment programme through which the Government distribute capital resources for housing to local authorities. The effectiveness or otherwise of those strategies will have a bearing on the resources allocated to authorities through the process that we are debating tonight. Let me remind Opposition Members what is in the consultation paper that we have issued to local authorities. We make it quite clear that Expenditure under the capital receipts initiative should be directed at meeting local priorities consistent with the local strategy. Such works might include"— and there follow six headings, including improving the energy efficiency of local authority and private sector housing and reducing CO2 emissions". That is a clear commitment to energy efficiency that should at least have been acknowledged by the right hon. Member for Suffolk, Coastal who spoke about a bipartisan approach, but never misses the opportunity to make a cheap point.

John Gummer (Conservative, Suffolk Coastal)

The Minister well knows that it is always easy for Ministers to read out their speeches, although I would have been pretty angry had any of my junior Ministers read out such a speech, which is clearly unamended. At least I hope that it is unamended. If the Minister has amended it, he clearly does not get the point. We want the provision on the face of the Bill. Only then can we be sure that local authorities comply with it, If the Bill says "might" or "may" or "could" or "we might have purposes to see" in the same way as the consultation document that I have before me, it does not have the effect of law. I am asking the hon. Gentleman to promise that the provision will be on the face of the Bill. If he answers that simple question, we need not hear the rest of his speech.

Nick Raynsford (Labour, Greenwich and Woolwich)

Once again, the right hon. Gentleman reveals that he has not read the consultation paper. Paragraph 24 contains a clear statement of the mechanism that will be adopted to allocate resources under the initiative. Local authorities will be asked for detailed spending plans showing how they are taking account of the objectives that have been specified, including achieving greater energy efficiency. It states: The Government Office will advise Ministers on the merits of the proposed spending plans … Having given due consideration to this advice, Ministers may wish to vary the final allocations to individual authorities. There is a very clear mechanism for doing something about energy efficiency rather than talking about it. The right hon. Member for Suffolk, Coastal may have heard the hon. Member for South Suffolk referring to the Environment Committee report of 1993. That report recommended—indeed, the hon. Gentleman referred specifically to the recommendation—that the Government of the day should extend the capital receipts holiday to enable local authorities to do more in the way of energy efficiency. Did the Government of the day, whom Conservative Members supported, follow that advice? No, they did not. They did not continue the capital receipts holiday; they ended it. They ignored the advice of the Environment Committee, which they now have the cheek to quote at this Government. The Government are acting on the advice of the Environment Committee. We are releasing receipts under a capital receipts initiative which is designed to achieve precisely the energy efficiency objective among others.

Tim Yeo (Conservative, South Suffolk)

The hon. Gentleman, and not any Opposition Member present, was a member of that Committee, signed that report and made the recommendation—it was a unanimous recommendation of the Committee—which he now appears to want to reject.

Nick Raynsford (Labour, Greenwich and Woolwich)

On the contrary, as I have just pointed out to the hon. Gentleman, we are acting in accord with that recommendation. We are bringing forward the capital receipts initiative, we are making additional resources available to local authorities and we are saying clearly that energy efficiency is one of the objectives. Of course, there are other objectives. We know of the problems of homelessness that the previous Government ignored. Action is necessary to deal with that. We know about the number of people living in rotten, miserable, poor conditions due to the failure of the previous Government to invest adequately in improving the condition of the housing stock. That is a priority as well. We are clear that energy efficiency is one of our objectives, and we are acting under the initiative to give effect to it.

Eric Pickles (Conservative, Brentwood and Ongar)

I am sorry that the Minister seems to be quite rattled on this subject. Perhaps I can bring him back to the central point. Will he explain why it is stronger and tougher on ensuring that energy efficiency is brought about to give discretion to Ministers rather then putting a provision in the Bill?

Nick Raynsford (Labour, Greenwich and Woolwich)

Sadly, the hon. Gentleman, along with all his hon. Friends, appears to have ignored entirely the fact that the new clause as drafted would be totally defective, as I have said. If he wishes us to put into effect ineffective legislation that requires the Secretary of State or Ministers to have regard to entirely irrelevant considerations when allocating supplementary credit approvals for other purposes, all I can say is that his party has learned very little over 17 years.

Eric Pickles (Conservative, Brentwood and Ongar)

rose—

Nick Raynsford (Labour, Greenwich and Woolwich)

No, I shall not give way. I have given way already. In 17 years in government, Conservative Members entirely failed to learn one very simple lesson: to be effective one needs to have clear objectives, to state them and to have mechanisms for implementing them. The Government have clear objectives and a commitment to implementing them. We shall ensure increased investment, which will contribute towards increased energy efficiency: action, not words.

Tim Yeo (Conservative, South Suffolk)

I must, with regret, refer to—since Hansard will not report—the frivolity with which the Minister for Local Government and Housing greeted nearly all the comments made by Opposition Members during a debate about a very serious issue, to which the Government and the Prime Minister pretend consistently to pay lip service. When faced with it in the House, all the hon. Lady was able to do was giggle and make cheap points from a sedentary position. As my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) pointed out, the Minister for London and Construction resorted to the oldest argument: to attack a new clause on the ground of its unworkability, some shortcoming in its drafting. I simply say that I hope that, in his own interests, he will not resort to that argument again when he deals with other matters in the House or in Committee. My right hon. Friend the Member for Suffolk, Coastal exposed the yawning gap between the Government's proclaimed environmental objectives and the actual policies that have so far been announced. The Minister could have put matters right in his reply, but he totally failed to do so. He relied on the drafting of his consultation paper, which says that the purposes for which supplementary credits might be applied might include energy efficiency. Given the Government's total disregard of the commitments that have been given in specific and unequivocal terms, I cannot be hopeful—nor can the House—that a commitment that is couched so vaguely in a consultation paper is likely to be honoured if it does not suit the Government at the time to do so. If the Government really intended to give energy efficiency proper priority, they would include it in the Bill, as I, my right hon. Friend the Member for Suffolk, Coastal and other hon. Friends have suggested. I very much regret that the Minister has so cavalierly ignored the key arguments advanced in support of the new clause. He will not look back on his contribution to the debate with much satisfaction. However, in the interests of the House and of getting on to other important matters, I beg to ask leave to withdraw the motion.

HOUSING NEED CRITERIA TO BE THE SAME IN ENGLAND AND WALES

Nigel Evans (Conservative, Ribble Valley)

I beg to move, That the clause be read a Second time.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this, it will be convenient to discuss new clause 8—Total amount of supplementary credit approvals to he allocated between England and Wales according to relative share of funding for local government in those countries— 'The Secretary of State shall secure that the allocation of the total amount of supplementary credit approvals as between England and Wales accords with the formulae employed to determine the relative levels of funding of local authority revenue expenditure in England and Wales.'.

Nigel Evans (Conservative, Ribble Valley)

I have great pleasure in moving new clause 6. It has become quite apparent that, although Labour Members have wailed 18 years to be in government, they have forgotten what it is to be the Government of the country. One of the great challenges and opportunities for a Government is to answer the questions that are posed. I am afraid that they have signally failed to do that since they took office. I shall give the Minister an opportunity to answer at least two questions on the allocation of supplementary credit approvals, which many people living in Wales will be asking themselves concerning the Bill—although, as we saw, the Government were asked many questions on the issue of devolution, and not only did we not get any answers, but we seemed to get more questions. I understand that there is a timetable for procedure involving SCAs, but Wales is seemingly being left in the dark about how much money it will receive. My hon. Friend the Member for Christchurch (Mr. Chope) tabled a question on the issue. Even though I am going to ask the question again in this debate, I should say that the Treasury did not seem to know the answer earlier. We shall be listening for any further information from the Minister. New clauses 6 and 8 will give the Minister the opportunity to tell the people of Wales specifically how much they will receive of the allocations of £200 million and £700 million. It will depend on what formula is used, how the money will be distributed and what criteria will be used. Will the Barnett formula he used to allocate the total budget? We know that the Barnett formula was first used in 1978. It is an example of a non-statutory policy rule based on a mutual understanding between parties in a policy network, the implementation of which is subject to both sides observing the behavioural rules of the game. Thus, for example, if £1 billion is added to planned health service expenditure in England, £106.6 million would be added to the Scottish block and £60.2 million to the Welsh block. The system offers three advantages to the territorial Departments. First, the operation of the formula protects to a large extent the existing situation, where spending per head is above the national average. Secondly, there is no need for the Departments to argue the case for equal treatment on each occasion that a relevant programme in England receives increased funding. Thirdly, the Secretary of State retains the freedom to allocate the block between programmes. We might this evening be seeing the ending of the use of the Barnett formula. Perhaps it is an idea of the Government in order to distance themselves from Wales. Together with the devolution referendum, perhaps the Government are slowly but surely moving away from their commitment to Wales. If the Barnett formula will not be used, what measures will be used? We already know that Wales is being downgraded by the Secretary of State for Wales and that he wants to see Wales marginalised in the United Kingdom, with his powers being transferred almost lock, stock and barrel to the turbo-charged county council, otherwise known as the Assembly, which will sit in Cardiff. The Minister has the opportunity to tell the people of Wales, and she must do so, whether they will lose out under this deal. The great fear is that they will, and that Wales, which has suffered too long from Labour-controlled local authorities will lose out.

Win Griffiths (Labour, Bridgend)

Has the hon. Gentleman read the Welsh consultation paper, because the answer is there?

Nigel Evans (Conservative, Ribble Valley)

Yes. I have read the Welsh consultation paper, but I did not get the answers to my questions. I hope that we will not be fobbed off merely by advice to the people of Wales to refer to the Welsh consultation paper. The Minister has an opportunity to give us a clear figure for how much money Wales will get and what formula will be used. I know the definitions that have been used in the consultation paper, but I want to know whether they will be exactly the same as the definitions that will be used in England. The people of Wales will be put in double jeopardy by the Government, as they sway from a tried and tested formula that has served Wales well for many years. Different needs criteria could cause tremendous problems. The only thing that is certain is that the people of Wales face needless uncertainty. The Minister should understand that Wales is not second class and the Welsh people are not second-class citizens. Wales deserves the answers to these questions. I started my speech by saying that answering questions is a responsibility of government. This Government have been quick to shirk that responsibility. They asked us for trust during the general election, but trust is a two-way street, and the journey starts here.

Hilary Armstrong (Labour, North West Durham)

It gives me great pleasure to answer the hon. Member for Ribble Valley (Mr. Evans). I realise that, because there are now no Welsh Tory Members of Parliament in the Labour party, it has been difficult for Opposition Members to keep up with this debate and with what has already been said about allocations in Wales and the previous Government's practice in determining housing need in Wales. We have inherited the same formula that they used. The new clause would do down Wales and make its position much worse. I welcome the hon. Member for Ribble Valley to the debate on the Bill, because we are always pleased to welcome new recruits. We announced last week after the Budget the amounts that the Chancellor had allocated to England, Scotland, Wales and Northern Ireland. We will use the Barnett formula—

Nigel Evans (Conservative, Ribble Valley)

Will the Minister give way?

Hilary Armstrong (Labour, North West Durham)

I am trying to answer the hon. Gentleman's questions. We will therefore allocate £9.54 million this year to Wales and £33.38 million next year. That is the allocation according to the Barnett formula and we will undertake consultation in Wales on the precise distribution mechanism. As I have said, the definition of need was used consistently by the previous Government in their allocation year on year to the housing programme in Wales. They recognised that housing need in Wales is different from that in England, because Welsh housing stock is different. That is reflected in the manner in which need is assessed. I hope that the hon. Member for Ribble Valley understands that his new clause would be to the detriment of Wales. The indicators used in the allocation of resources for capital expenditure will cover broadly the same measures for all authorities, but the differences between England and Wales have been developed to take account of the differences in the housing needs of English and Welsh authorities. For example, the differences include the high demand for renovation grants in Wales, reflecting the higher level of unfitness in the private sector stock and the economic circumstances of owner-occupiers. Those needs will, of course, be reviewed when the results of the English and Welsh house condition survey become available. Consultation papers issued by the Department and the Welsh Office set out the needs indicators that we propose to use in each case. Those are available for people in Wales and all Welsh authorities to examine, and we will consult them.

Bernard Jenkin (Conservative, North Essex)

I am sorry to take the Minister back to the issue of the shares that England and Wales will receive. She gave us—strangely—the figures that the Chief Secretary failed to give in a written answer today. Will she explain why that information is available for her speech, but was not available to the Chief Secretary? Will she also explain, or perhaps confirm, that the Bill and the allocations represent extra money for housing in England and Wales but not in Scotland? Can she give us a figure for Scotland?

Hilary Armstrong (Labour, North West Durham)

I suspect that I would be out of order if I strayed too far on to the subject of Scotland, but—as I have already said—the amount allocated by the Chancellor last week covered England, Scotland, Northern Ireland and Wales. I have not announced any new figures today and I am concerned that that has not been reflected in the written answer. If the hon. Gentleman will give me a copy of the question, I shall respond to him on another occasion. I suspect that the problem lies in the nature of the question that was asked.

Christopher Chope (Conservative, Christchurch)

Will the Minister give way?

Hilary Armstrong (Labour, North West Durham)

I have already offered to respond to the question on another occasion.

Christopher Chope (Conservative, Christchurch)

rose—

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. Is the hon. Lady giving way?

Hilary Armstrong (Labour, North West Durham)

No. [Interruption.] I am sorry. I have not seen that question. I cannot be expected to give a response at the Dispatch Box.

Richard Ottaway (Conservative, Croydon South)

That is what the hon. Lady is paid for.

Hilary Armstrong (Labour, North West Durham)

It is not what I am paid for: I am paid to be honest and straight with Parliament. I must have proper and appropriate discussions with colleagues. Hon. Members earlier accused me of being frivolous, but I was not. I was trying to draw hon. Members' attention to the fact that they had not read the consultation document. They should have the decency to deal with questions properly. I am seeking to do that, and you are saying, "Oh no, you don't need to do it properly, you can give me a quick answer across the Dispatch Box." That is not the way I work. I shall come back to you with an answer.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. I remind the hon. Lady that she is continually using the word "you".

Hilary Armstrong (Labour, North West Durham)

Sorry. Mr. Deputy Speaker, I was getting carried away. The people of Wales want parity and fairness. The Bill will give them the fairness that the previous Government were not prepared to give them, because they did not deal with the real needs of the people in Wales. This Government are prepared to face the problems of housing need that were so neglected by the previous Administration. I hope that, having been given straight answers to his questions, the hon. Gentleman will not press the new clause. If he does, we will resist it.

Nigel Evans (Conservative, Ribble Valley)

The Minister began by saying that there were no Welsh Members of Parliament in the Labour party.

Hilary Armstrong (Labour, North West Durham)

I said that there were none in the Tory party.

Nigel Evans (Conservative, Ribble Valley)

Hansard will no doubt help the hon. Lady, but that is what she said. Perhaps she was pre-empting the next general election. We shall see. The hon. Lady also said that the new clauses would do down Wales. That is not our intention. We wanted to discover whether the Government were intent on doing down Wales. No one has done more to assist Wales in the past 18 years than the Conservative Government, as can be seen from the figures for expenditure per head of population and from inward investment into Wales. I have no reservations about our commitment to Wales. We wanted clarification on the Barnett formula, because it was not clear in the document. It is amazing that my hon. Friend the Member for Christchurch (Mr. Chope) received a non-reply from the Chief Secretary to the Treasury earlier today, yet the Minister can give us the exact figures. I am quietly bedazzled by that, but perhaps she will consider the matter and tell us later why the Treasury Minister was unable to answer the question that she has just answered. We want clarification on a number of points. The Government have clarified one matter, but I am still not happy about the definition of housing need. However, I beg to ask leave to withdraw the motion.

Christopher Chope (Conservative, Christchurch)

On a point of order, Mr. Deputy Speaker. An important issue arose in that debate. When the Budget was announced, a press notice said that the allocation between England, Scotland, Wales and Northern Ireland of the £200 million for housing would be announced shortly after the Budget. I tabled a priority notice question for written answer today from the Chancellor of the Exchequer. I received an answer from the Chief Secretary to the Treasury saying that he would write to me shortly. The hon. Lady has now given a partial answer to that question, which is extraordinary.

Win Griffiths (Labour, Bridgend)

The hon. Gentleman should think himself lucky.

Christopher Chope (Conservative, Christchurch)

That is my point of order. Are the House and the Opposition entitled to obtain information by seeking answers to parliamentary questions, or are we to be given information as and when the Government design to give it to us?

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

The content of parliamentary answers is not a matter for the Chair.

POWER IN PLACE OF DUTY TO SPECIFY AMORTISATION PERIOD

Christopher Chope (Conservative, Christchurch)

I beg to move amendment No. 3, in page 1, leave out lines 16 to 21.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this, it will be convenient to discuss amendment No. 4, in page 1, line 21, at end add ', but no period so specified shall exceed seven years, except in respect of old loan charge grants.'.

Christopher Chope (Conservative, Christchurch)

We discussed clause 2 in Committee at considerable length. The Opposition have grave suspicions about the clause. We were worried that it would be used to enable local authorities to capitalise their revenue expenditure, so that they would capitalise the money that they needed to spend this year and impose a burden on future generations through a debt that would be paid over a period of more than seven years. In Committee, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), was unable to give a specific example of a local authority that had asked the Government for a special dispensation for a period in excess of seven years. In the light of that, the Committee divided. The hon. Gentleman said that it was reasonable for a period of more than seven years to be allowed for the specific category of old loan charge debts. Accepting that, we have now tabled an amendment that would apply the seven-year rule to all categories of debt other than old loan charge debts. I hope that the Government will accept the amendment, because it would deal with all the points discussed in Committee. If they cannot accept it, our suspicions will be roused to an ever greater extent than they have been already by the Government's shilly-shallying on this issue. It is a short, simple point. If any more local authorities are pressing to wrap up their revenue expenditure in capital and repay it over a period in excess of seven years, let us hear about them tonight. We should be open about this issue, and if no local authorities are pressing for that, the Government should accept this reasonable amendment.

Nick Raynsford (Labour, Greenwich and Woolwich)

As I said to the hon. Gentleman in Committee when we debated this matter, he is making a mountain out of a molehill. This is a relatively minor issue and certainly does not justify his paranoia about widespread financial consequences for local authorities. It is not like that at all. The two amendments are contradictory: one would leave out the whole of clause 2, and the second would make a specific amendment to the procedure. The hon. Gentleman accepted that there could be an appropriate arrangement for amortisation of old loan charge grants. That makes the point that amendment No. 3 is inappropriate, because it would remove the flexibility to make such arrangements. We do not believe that there is a case for amendment No. 3 under any circumstances. At present, supplementary credit approvals are issued in respect of capitalisation directions in limited circumstances. The only example of that being done routinely—I stress, routinely—is for the commutation of loan charge grants. That is a small, uncontroversial programme, for which about £4.5 million to £5 million a year is available. All we are seeking is for Ministers to have the discretion to specify an amortisation period appropriate for the particular expenditure and the circumstances of each authority. Although I gave an example to the hon. Member for Christchurch of the commutation of loan charge grants, that is not the only circumstance in which supplementary credit approval might be given.

Christopher Chope (Conservative, Christchurch)

Can the Minister give some more examples?

Nick Raynsford (Labour, Greenwich and Woolwich)

I can. Thurrock—the local authority which most recently made representations to the Department—is seeking assistance with the capitalisation of the cost of local government reorganisation. That is an issue where there might be a case for provision for capitalisation and for repayment over a longer period than seven years. Certainly, Thurrock council told us that the seven-year amortisation period was too short and would represent a significant revenue burden on it.

Christopher Chope (Conservative, Christchurch)

I am grateful for that example, but it raises concerns. Will the Minister agree to place the papers in relation to that application in the Library so that hon. Members can have a look at them? Will he confirm that the application is for a sum of £1 million or less?

Nick Raynsford (Labour, Greenwich and Woolwich)

I shall be happy to write to the hon. Gentleman to set out the full details about that case, but I used it for illustration in response to a request for an indication of circumstances other than dealing with old loan charges where the provision might be appropriate. The commutation of old loan charge grants is a good example of the need for the clause. The previous Administration meant commutation to be neutral for local authorities, but it led to revenue losses through no fault of the authorities. Consequently, authorities are allowed to capitalise their commutation costs and borrow to meet them. It is unreasonable to impose a short amortisation period in these cases. The clause is relevant to other cases in which revenue expenditure is capitalised. We would allow authorities to borrow for revenue purposes only in the most exceptional circumstances where it would not be reasonable for them to meet the expenditure out of their existing revenue resources. The seven-year rule means that authorities would almost immediately have to start finding large sums to repay the debt which, in some circumstances, would have unacceptable financial consequences for authorities. We are seeking more flexibility to deal with cases on their merits. Amendment No. 4 would restrict the benefits of clause 2 to cases involving old loan charge grants. I agree that more flexible amortisation periods are needed in connection with SCAs relating to the commutation of old loan charge grants, but equal flexibility is needed in connection with other SCAs—in particular, those made possible by clause 1. Another example for the hon. Member for Christchurch is a case where there might be significant revenue expenditure—for example, on preliminary research or consultation necessary for one or more schemes involving expenditure under the capital receipts initiative. I am not suggesting that that will be the case, but there might be circumstances in which there would be a reasonable case for the revenue costs to be capitalised. In such cases, it would be absurd if there were no flexibility to allow that or an amortisation period appropriate to the circumstances of the authority. We would need to be sure that the authority could not afford to meet the expenditure from its existing revenue resources. Under the present law, we would tell the authority that it must find at least one seventh of the borrowed sum out of its revenue in the following year, and the same amount in each of the six subsequent years. If the authority could not cope with that revenue commitment, it would be denied this assistance. I hope that I have made clear to the hon. Member for Christchurch that we are not dealing with a major cause of additional local authority expenditure, but with limited circumstances. We are seeking the appropriate flexibility to cope with those circumstances and to respond to the needs of individual authorities without an unduly rigid framework. I hope that the hon. Gentleman will agree, in the circumstances, to withdraw his amendment.

Christopher Chope (Conservative, Christchurch)

I am grateful to the Minister for his response, although I am disappointed that he did not make such a response in Committee, where he seemed remarkably coy about giving any example other than the generality of loan charge grants. We now have it on record that there is a Labour-controlled local authority that is seeking to capitalise its revenue expenditure and to pay back that capital over a period in excess of seven years. How does that fit with the Chancellor's so-called "golden rule" on public borrowing? It does not fit in with it at all. We are anxious about the powers that the Government are giving themselves, and we shall seek to monitor vigorously the way in which the Government exercise these powers. But certainly we will not press the amendment to a vote, and I beg to ask leave to withdraw the amendment.

Hilary Armstrong (Labour, North West Durham)

I beg to move, That the Bill be now read the Third time. We have had a relatively short but interesting set of debates leading to Third Reading. The Bill lays the foundation for the Labour Government to deliver on our manifesto pledge to increase the opportunity for housing need to be met through a capital receipts initiative. That is the first vital step towards the Government's objective of ending years of under-investment in housing. The Bill has been well received by local government and the housing world, which has struggled to come through those years of under-investment. Many people have suffered because their house has not been improved; others have not been able to get a house because there is insufficient housing in their area. The Government are living up to our undertaking in Committee that the Bill's Report stage would be taken after the Budget. One of our debates this afternoon arose out of the Budget and our spending commitments for this year and the next. We are having a comprehensive spending review and examining how housing need can be addressed in the future. The Chancellor announced that significant additional capital resources are being made available to meet pressing housing need across the UK and, as part of the Government's capital receipts initiative, an additional £174 million has been provided in England this year, with a further £610 million available in 1998–99. I am sorry that the hon. Member for Christchurch (Mr. Chope) did not get a fuller response. I shall write to him to ensure that he knows the amounts allocated to each of the four nations of the UK.

Christopher Chope (Conservative, Christchurch)

Were the allocations announced through a press notice? In what way where the allocations communicated to those concerned in Northern Ireland, Wales, Scotland and England?

Hilary Armstrong (Labour, North West Durham)

I shall write to the hon. Gentleman about this matter. I announced the English figures at a conference last week. I am responsible for those and they were in a subsequent press release. I apologise for the fact that the hon. Member has not seen them, but I think that I referred to them in Committee last week. A Welsh Office press release announced the amounts in Wales on 3 July.

Bernard Jenkin (Conservative, North Essex)

That makes it all the more extraordinary that the Chief Secretary to the Treasury was not able to give my hon. Friend the Member for Christchurch (Mr. Chope) a proper answer today.

Hilary Armstrong (Labour, North West Durham)

I have dealt with that matter and I have tried to be open and honest with Opposition Members. I have said that I shall write to the hon. Member for Christchurch. The Opposition's behaviour is extraordinary. They too have been in government and I can remember many occasions when they were less than perfect. Obviously they are learning how to be in opposition and it is going to be a long learning curve. The Government face a legacy of massive under-investment in housing throughout the United Kingdom. The capital receipts initiative should concentrate on England and Wales. When Opposition Members find out the amounts for Northern Ireland and Scotland, they will realise that although the receipts concentrate on England and Wales we know that there is real housing need in Northern Ireland and Scotland and so have extended the initiative to them. We will make announcements about the application of those resources in due course. The Government's proposals for England were set out in the consultation paper. The Welsh paper was issued recently and I am pleased that Opposition Members have read it. The initiatives have been warmly welcomed on both sides of the House and, in particular, by local authorities. The House will be pleased to note that, in Committee, Opposition Members were largely able to endorse and support the broad thrust of the initiative. I think that that has been true of our debates today. There have been some mischievous responses to some of our points, but I feel none the less that there was overall recognition that the level of housing need demands a response. It seems fair to us that some of the money made from the sale of council housing should go back into housing so that we invest in social housing in areas where houses have been sold and so that the nature and condition of the housing enables people to make it into a real home. Discussions with the Local Government Association will continue so that we can ensure that the initiative continues to benefit from a genuine partnership between central and local government. We look forward to receiving views from the LGA, local authorities and other interested parties when they have had time to read the consultation paper and consider how they would best be able to implement the intent of the Bill in their areas. The resources that will be released will enable local authorities to work in partnership with all housing providers, tenants, residents and the private sector to begin to tackle that legacy of neglect, decline and decay that is all too often the prospect in too many areas. We will also encourage authorities to take every opportunity to support projects that complement the Government's wider policy initiatives. We discussed one earlier—the policy to encourage energy efficiency and CO2 emissions. The Government have more than that single objective in relation to this initiative. We want training opportunities to be increased. We are concerned about some of the training offered in the construction industry and the fact that so many young people start construction industry courses but do not finish them. Through this initiative, we want to get more people into training—good training—in the construction industry, so that they end up with a job and so that young people, in particular, can be led into work and financial independence. This initiative is one clear way in which that other overriding strategy of the Government will be met.

Christopher Chope (Conservative, Christchurch)

Can the Minister tell the House how many extra jobs will be created in the construction industry as a result of the £200 million allocation this year in the supplementary credit approvals and the £700 million next year?

Hilary Armstrong (Labour, North West Durham)

That depends on how authorities decide to use the initiative, whether they go into renovation or new build and whether they encourage work with other organisations, such as housing associations, whereby the money will be matched with money from the private sector so that the effect of the initiative will be greater. It is impossible to give a proper estimate of the number of jobs and I do not want to speculate. We know, however, that many more jobs will be created by this initiative than would have been if we had not taken it. This Government will create many more jobs in this area than did the previous Government. In particular, we will encourage young people to be involved in the initiatives that local government takes through the Bill. Opposition Members were somewhat scathing about the amounts that we intend to release this year. I remind them that we cannot release any money until the Bill is enacted. We want to get the Bill through to release some money to local authorities this year. That is why we are pressing ahead with it. The Bill will give us, local authorities and others in the housing sector the real opportunity to be imaginative and creative in how the money is used to encourage regeneration and pull in money from elsewhere so that jobs are created for young men and women and the other priorities identified in the consultation document can be put into practice. The Bill and the resources provided by my right hon. Friend the Chancellor of the Exchequer should leave the House in no doubt that the Government are serious about tackling poor housing, poor health, ghetto estates and joblessness. We are not content that we were left a legacy that did not need moving and shifting. If the previous Government were honest, they would be ashamed of that legacy. We are not prepared simply to inherit it. We want to give people opportunity. We are determined that they will be given opportunity. A decent home is always necessary if people are to be able to take advantage of opportunities. The Bill is one way in which the Government are fulfilling their commitment to the British people to open up opportunities, offer decent housing for everyone and ensure that it is no longer necessary for anyone to sleep in the streets—a shameful episode that we inherited from the previous Government. The Bill is the first this Parliament to have reached Third Reading having been through a normal Committee stage. It is with great pleasure that I commend it to the House.

Christopher Chope (Conservative, Christchurch)

The Minister noted that this is the first Bill this Parliament to have had a normal Committee stage. It is a commentary on the Government that none of their Back Benchers participated in Committee or on Report; everything has been left to the Front-Bench spokesmen. The Labour party manifesto included the following commitment: capital receipts from the sale of council houses, received but not spent by local councils, will be re-invested in building new houses and rehabilitating old ones. This will be phased to match the capacity of the building industry and to meet the requirements of prudent economic management. Having discovered from the Budget that there would be some £200 million extra for Scotland, England, Wales and Northern Ireland this financial year. I asked the Chancellor of the Exchequer what estimate of the capacity of the construction industry in 1997–98 and 1998–99 underlay his decision to allocate extra sums under the Government's capital receipts initiative. I was asking him to explain exactly how the phasing would match the capacity of the building industry and meet the requirements of sound economic management. Today, the Chief Secretary to the Treasury replied that he would let me have a reply as soon as possible. I also asked the Chancellor about the allocation of the £200 million between England, Scotland, Wales and Northern Ireland. Again, I received the answer that he would let me have a reply as soon as possible. Put together, those answers leave one with the feeling that the Government are arrogant beyond belief. They are not even prepared to let an Opposition spokesman speaking in a debate material to the subject of the questions to have information that, we now learn from the Minister, she divulged during a press conference last week. It was divulged in debate today, but the Chief Secretary was not prepared to divulge it to the Opposition Front-Bench spokesman in answer to a priority written question. We know that the Government want to take debate away from this Chamber and this Parliament. This is another example of the arrogant way in which they are seeking to achieve that objective. I hope that you, Mr. Deputy Speaker, and Madam Speaker, will intervene to protect the rights of Parliament and of the Opposition to receive timely information.

Michael Martin (Deputy Speaker, Glasgow Springburn)

Order. The hon. Gentleman must not draw the Chair into his case.

Christopher Chope (Conservative, Christchurch)

I raised the issue on a point of order earlier. I shall insist that we get assurances from the Government that we will not again be put in a position where information that is clearly available to the Government is withheld from the Opposition.

Hilary Armstrong (Labour, North West Durham)

The hon. Gentleman was given the information.

Christopher Chope (Conservative, Christchurch)

The hon. Lady says that the information was given to me. It was given to the House three or four hours after I had been told that it was not available.

Hilary Armstrong (Labour, North West Durham)

I understand that the hon. Gentleman asked for information from the Chief Secretary for all four nations. The Bill relates to England and Wales. He was given the information on England and Wales. He did not ask for the information that he says he asked for.

Christopher Chope (Conservative, Christchurch)

The hon. Lady is clearly desperate. In this debate, she said that the Barnett formula applies. If it applies to the £200 million, the results of its application could have been announced in a press notice on Budget day in the same way as detail was announced, using that formula, for allocations available under the health service and education initiatives. The Barnett formula was used for both those initiatives and the figures were produced. In respect of the so-called capital receipts initiative, the press notice from the Department of the Environment, Transport and the Regions said that the allocation would be announced shortly, clearly implying that either the Government had not made up their mind or they were not sure whether they would use the Barnett formula. Perhaps we now know that they wanted to keep the information secret and prevent the Opposition knowing about it so that they could divulge it to suit their convenience. Despite the Budget, at the end of this financial year and the next, local authorities will have more unspent capital receipts from the sale of council houses than at the time of the general election. I cannot believe that many Labour party supporters envisaged that, two years after the election of a Labour Government, the total of unspent receipts would be greater than at the time of the general election, yet that will be the impact of the Chancellor's Budget announcement and of the Bill. It is going to be a grave disappointment to Labour supporters. We know what the Bill does not do. Contrary to the wishes of the Local Government Association, it does not remove restrictions on the use of new receipts. As recently as 5 June, the LGA said: Restrictions on the use of new receipts should be removed. Nor does the Bill remove restrictions on the use of set-aside receipts; it merely allows them to be taken into account in the granting of credit approvals. The Bill is a charade. It purports to be something other than what it is. Nor is the Bill's application confined to house receipts and housing authorities, as the Government said all along it would be. The consultation paper, the rhetoric and, indeed, the Labour party manifesto, refer to housing receipts, but under the Bill the Government are taking power to allow non-housing receipts set-aside to be taken into account in the granting of credit approvals. The Bill also allows set-aside receipts to be taken into account for any purpose of credit approval. I raised this issue in Committee. The Minister replied: We have made it quite clear that the Bill deals specifically with housing receipts. Unfortunately, the text of the Bill does not match her words. She continued: Over many years in opposition … we have been committed to an initiative to deal specifically with the sale of council houses and the proceeds of that sale. We wanted to deal with the problems that local authority areas have experienced as a result with both the state of their existing stock and, in some cases, a simple lack of housing. Our priority is to meet the commitments that we made in our manifesto."—[Official Report, Standing Committee A, 24 June 1997; c. 16.] The hon. Lady has not said during the passage of the Bill why it goes far wider than dealing with housing authorities and the receipts from housing sales. We can consider the Bill on Third Reading with the benefit of the knowledge that the extra £200 million and £700 million announced in the Budget are a grave disappointment. The Local Government Association estimated that some £5 billion was available. It wanted an extra £500 million this year and a lot more beyond. The Bill has raised expectations that can never be realised. Conservative Members will oppose it.

Paul Beresford (Conservative, Mole Valley)

I support what my hon. Friend the Member for Christchurch (Mr. Chope) has said, especially his latter points. There has been much talk on the Government Benches, when Labour Members have been allowed to speak, to the effect that the Bill is related to capital receipts, but it is related to set-aside. At present, councils can take into account the usable capital receipts, which obviously have a link to set-aside, especially if the local authority has debt. I emphasise the point that my hon. Friend makes. Clause 1 is merely flag-waving to a promise that the Labour Government cannot fulfil. They are releasing not capital receipts but capital credit allowances. That is all. Any claim that they are doing anything more than that is fictitious. My hon. Friend the Member for Christchurch did not touch on clause 2, which I find especially disturbing. To capitalise revenue in specific circumstances is just acceptable in accounting terms. The reorganisation costs of many of the local authorities that wished to be unitary authorities were accepted by the previous Government. I understand why. It was expected that those costs would be paid back within seven years. Thurrock was mentioned in the debate. Thurrock was enthusiastically in favour of unitary status because it would make the council more efficient, better able to handle its services and able to make considerable savings. Capitalisation over seven years could adequately be met by any competent authority, including Thurrock. As a proportion of its total expenditure, the revenue costs are small. We are giving an open cheque book to local authorities to allow them to approach the Secretary of State and ask to capitalise revenue on the never-never without reporting to the House. That is a dangerous move and one that the Government will rue. Local authorities and the children of the parents who are paying the bills now will have to bear the costs. This is a case of revenue costs on the never-never and I support my hon. Friend the Member for Christchurch in rejecting the Bill.

Adrian Sanders (Liberal Democrat, Torbay)

This is not a Bill about capital receipts. It is not about allowing local authorities to use their own money. It is about giving them permission to borrow someone else's money. The supplementary credit approvals announced in the Budget are not up to the scale of the task ahead. They are simply straws in the wind. About 28,000 homes could be built in the next two years if all the money allocated was put into new build—it will not be, but let us assume that it will—yet the Government's own estimates are that we need between 60,000 and 100,000 new affordable rented homes each year. So 28,000 has to be set against 60,000 at the bottom end of the estimate and 100,000 at the top end. The amount of money available this year will provide only 4,000 new builds. We should put that into context. On 1 April 1996, in the constituency of the hon. Member for North-West Durham (Ms Armstrong), 4,738 people were on the waiting list. Hon. Members should remember that just 4,000 homes are to be built in the whole of the United Kingdom. In the constituency of the hon. Member for Greenwich (Mr. Raynsford) the waiting list is 6,445. I have an apology to make to the House for something that I said on Second Reading to the hon. Member for Luton, South (Ms Moran). I said that she might be disappointed to find that the Bill will provide enough money to provide only four new houses in Luton. I was wrong. It is five new houses. That is all that the new money will provide. We should not get too excited. Labour supporters will be extremely disappointed if they compare new Labour's proposals with those of previous Labour Governments. During the lifetime of this Government, it is likely that between 28,000 and 60,000 new homes will be built in the social sector as a consequence of the supplementary credit approvals. That compares with new build between 1945 and 1951 of 850,000. The Labour Government of 1965 to 1970 built 1,100,000 new homes. The Labour Government of 1974 to 1979 built 850,000. The new Labour Government's proposals are peanuts. The best that one can say is that some extra money is better than no money. It is with some sadness that we shall support the Government tonight—[Laughter.] it is with some sadness, because there was a possibility of doing a great deal more than has been proposed in the Budget. When one is in a hole, as the Government are over housing, one does not carry on digging. That is the problem. The Bill does not go far enough—[Interruption.]

Michael Martin (Deputy Speaker, Glasgow Springburn)

Order. There must be quiet in the Chamber when an hon. Member is addressing it.

Adrian Sanders (Liberal Democrat, Torbay)

We support the Government with sadness because the Bill does not go far enough. I hope that the thousands of people in each hon. Member's constituency who are on waiting lists will know that their plight is being laughed at.